3 Out-of-Favor Stocks We're Skeptical Of

Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.

While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Asana (ASAN)

One-Month Return: -1.8%

Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE:ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.

Why Should You Dump ASAN?

1. Products, pricing, or go-to-market strategy may need some adjustments as its 9.6% average billings growth over the last year was weak
2. Platform has low switching costs as its net revenue retention rate of 95.7% demonstrates high turnover
3. Drawn-out sales process reflects its software’s integration hurdles with enterprise clients, restraining customer growth potential

Asana is trading at $13.39 per share, or 3.8x forward price-to-sales. To fully understand why you should be careful with ASAN, check out our full research report (it’s free for active Edge members).

Owens Corning (OC)

One-Month Return: -17.3%

Credited with the discovery of fiberglass, Owens Corning (NYSE:OC) supplies building and construction materials to the United States and international markets.

Why Do We Steer Clear of OC?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Efficiency has decreased over the last five years as its operating margin fell by 13.6 percentage points
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Owens Corning’s stock price of $104.50 implies a valuation ratio of 10.1x forward P/E. Read our free research report to see why you should think twice about including OC in your portfolio.

Dave & Buster's (PLAY)

One-Month Return: -16.9%

Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.

Why Do We Pass on PLAY?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
2. Negative free cash flow raises questions about the return timeline for its investments
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $14.01 per share, Dave & Buster's trades at 12.7x forward P/E. Dive into our free research report to see why there are better opportunities than PLAY.

High-Quality Stocks for All Market Conditions

Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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